The US, Myanmar and the dragon in the background

Moves by the Obama administration to soften sanctions and reward Myanmar’s progress to democracy, while welcome, are not enough to meet the country’s economic growth needs, giving China a strategic advantage, Monish Tourangbam and Pawan Amin write.

Myanmar’s democratic transition and the consequent dynamics between Naypyitaw and Washington have commanded strategic priority for America’s Asia policy.

China’s long years of influence in Myanmar and the latter’s new overtures to diversify its relationships lend geostrategic significance to US-Myanmar ties. As the Obama years come to a close, and the White House prepares for its new President, how the US-Myanmar relationship pans out will be of interest to America’s strategic competitors and partners alike.

On 14 September, during Myanmar State Counsellor Aung San Suu Kyi’s official visit to the US, President Obama returned Myanmar to the status of a “least-developed beneficiary developing country.” This allows the US to restore trade benefits by reinstating preferential treatment to Myanmar under the Generalised System of Preferences program.

Calling Myanmar’s transition “remarkable”, President Obama scrapped those sanctions that could be lifted without congressional authorisation in order to reward the Southeast Asian nation for the progress made so far.

But not all sanctions could be removed immediately with an executive order of the President. Under the Bush Administration, the US Congress passed the Burma Freedom and Democracy Act to ban all imports from Myanmar. In 2013, the Obama administration relaxed some provisions of the Act, but continued the ban on imports of precious stones. It was believed that the trade in rubies and gems was run by corporations controlled by the military and clandestine businesses which in turn promoted corruption and human rights abuses.

Additionally, the Office of Foreign Asset Control (OFAC) of the US Treasury Department maintains a Specially Designated Nationals (SDN) list, which prohibits American companies from having business associations with the entities and individuals mentioned. The list includes “individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries” as well as “terrorists and narcotics traffickers designated under programs that are not country-specific”.

In May this year, OFAC removed seven enterprises and three state-owned banks in Myanmar from the sanctions list. OFAC also added a general license allowing US citizens to live and conduct business in Myanmar. At the same time, OFAC added six companies to the SDN list which were owned by Steven Law and his company Asia World, even though the company claims to have sold its mining operations and that it no longer has any interest in jade sector.

However, Asia World is one of Myanmar’s biggest conglomerates and similar sanctions on other businessmen have made it difficult for foreign investors to enter Myanmar’s market by restricting options for local partners in potential joint ventures. This indicates that despite its commitment to help Myanmar progress economically and sustain its democracy, the US is still treading cautiously as it goes about normalising its relations with the country.

President Obama faces domestic opposition in the US Congress from those who think persisting concerns regarding military involvement in dubious business operations warrant continued sanctions. Suu Kyi’s own policy on human rights violations against the Rohingyas has been a subject of extensive debate for some time.

While the Obama administration can take credit for defrosting ties with Myanmar’s military establishment, it is believed that the US Congress is in the driver’s seat in US-Myanmar relations, especially after the Republican Party’s 2014 congressional election victories. This has been highlighted by the steep budgetary cuts in military training to Myanmar and the reporting requirements the National Defense Authorization Act imposes on the Department of Defense for all military training or consultation offered to the Tatmadaw (Myanmar’s military).

This situationcould create more scope for China to increase its influence in the country through enhanced military relations. China has over the years also injected itself as a power broker in Myanmar by supporting strong minority rebel groups like the United Wa State Army, something that a distant power like the US cannot manage.

China became an important economic partner for Myanmar during its period of international isolation under the military government. With its recent democratic transition it was believed that increasing investments from the West would help Myanmar reduce its economic dependence on China. So far, however, investments from the US and elsewhere in the West have been unable to match those from China.

The new National League for Democracy (NLD) government finds itself forced to assure Beijing of the safety of its key investment projects as Myanmar strengthens ties with the US. Key among these is the Myitsone Dam project, over which Beijing is increasingly applying pressure for a speedy resolution. However, the NLD, which has also recently started the 21st Century Panglong Peace Conference to unite Myanmar’s different ethnic groups, is sensitive to the hostilities which are likely to break out with the Kachins should the Myitsone project go ahead as it is expected to submerge several villages in the Kachin area.

Thus, national security also becomes a driving force behind the need for Myanmar to develop new partners as a way of ensuring its economic growth.

5 Responses

NO, DASSK rightly got tired of hearing Susan Rice and Samantha Power drone endlessly on about ‘human rights’ and the faux ‘Rohingya’ issue.
Myanmar cannot possibly stabilize and carry out fair negotiations with anyone. As China is seen as the quick fix, and they have been in Myanmar a long time, it is no surprise that their conduct, while totally selfish, works. This accounts for poor US-Myanmar relations. In no way defending China or Russia whatsoever, they do not drone on about (illegal) Bangladeshi Muslims in Myanmar. They don’t care. That is also not to Myanmar’s long term benefit. However, if and until the illegal Bangladeshi migrants are deported back to Sheikh Hasina Wajed and her terrorist nation (where Hindus are routinely massacred), China’s fast talk will remain successful as will the trade deals that ensue.

It seems the Burmese do not care much about sanctions but international scholars are lawyering for them, of course, for their own political agendas. And by the way, shall we stop demonizing China? China is foolish in that it does not put in minimum standards for Chinese goods and investment to protect its reputation. But the fact that it’s foolish doesn’t mean it’s a demon. They do protect their interest like the USA does in a far larger scale.

Sure, lines are blurred at the border. Like any other country, China has multiple power players, not a single monolithic entity. Who’s supplying arms to the Was? Official government? Yunnan government? Or just local businessmen trying to make some money with tacit approval from local officials? Where is the evidence that it’s an official Chinese policy? There is none. China isn’t good and works for self-interest, just like any other country. But it’s not a devil.

What the so-called experts are saying is “protectionism doesn’t work.” “You can survive without trade in the 21st century.” Well, you may look at Haiti. They can’t even grow their own food today. Not necessarily the case before Clinton’s free trade agenda set in. Now, with even talks about importing chicken from Australia, don’t be surprised if Myanmar suffers the same fate as Haiti.

I’m not saying we should be better closed off. But definitely, we do not need to beg Americans to supply them with cheap clothing made from Burmese slave-like labor or jewels mined from hellish working conditions. Even if export-led growth is the best alternative, neither Korea nor China become what they are today by following free trade agenda. The best examples of “free trade works” are second-rate economies. Myanmar will not be a second-rate country.

Myanmar will not be a second rate country – NO, Myanmar is now a third-rate country.
Your are right though about the USA. Everything that the USA does is about “strategic containment” and selling of military hardware. All that talk about “democracy”, human rights etc etc are just so much bull… Saudi Arabia?(staunch ally) Pakistan? (recipient of massive aid, albeit mostly guns) Thailand (staunch ally, now a bit shaky).. The list goes on..

Well, I definitely agree that Myanmar is “now” a third-rate country. What I’m saying is if you pursue “free trade” policies, you will, at most, become a country like Thailand. Economies like China, Japan, and South Korea did use a mixture of organizational strategies, government subsidies, tariff and protectionism to get there.

o Who are you and where have you been?
It was such a breath of essential fresh air.
What was this thing about Burmese or any other Little people around the world should be deeeelighted about abie able to make soap and socks for rich Americans as a “Reward” crap? So thousands and thousands of students and pouble alike died and suffered unconscionable atrocities in jails and other incarcerated areas or out in the open so that Burmese (oc every one in the accused country) can be slaves all the same but right at home rather than have to run away from corrupt-est Thai and Malaysian police?
It is more than obvious- staring- anything the4 Yanks touches turn into bloody shit, every single time, all the time. And that was a success! Obama’s Foreign Policy Success! One must be totally insane to believe that.
Yes, Chinese are characteristically ruthless and care little for environment or even their own mothers if comes to money. But being done by the “Whites” is little solace for people currently done by the Chinks anyway.
Myitsone Dam is not just a a few villages flooded. It is the life of the country Burma. Yes, Burmese nowadays are forgetful about what is valuable or not to them after being exposed to those wonderful “Western Values” with so many youngsters “Educated” in US, UK, Germany, Australia, etc. E.g Burmese now would rather march fro gay rights than for the Karens and Kachins being literally slaughtered like pigs in their own ancestral villages because these “modern” Burmese are so liberal and progressive. But if the Irrawaddy were to get dammed and destroyed, the life of Chinese of any sort in the land of Burma will not be worth living. It is so stupid of Xi to insist on such crap or even to use it a bargaining chip for other more palatable concession, both of which indicating how such horrible and worthless “Friends” they are for the Burmese and will reap such benefit in return.
For the third or a billionth rate country. What of it? What does it even mean? And how does it even little but matter?
Haiti was a brilliant, brilliant, brilliant example. So long as the Burmese currently SELF-SUFFICIENT are so advanced and progressive to let themselves and their hitherto wonderful natural environment- no want of fresh water, land, coastal line, forest (destroyed as they are so far), minerals- and with sufficient food production allow itself to be f’ed up. then obviously they are not worthy of them.